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California Resolves Coin, Bullion Sales Tax Issue With Legislation

California bullion dealers seek clarity on tax regulation.
California bullion dealers seek clarity on tax regulation.

By National Coin and Bullion Association (NCBA) ……
 

Last week, Senate Bill 889 (SB 889) reached the desk of California Governor Gavin Newsom for his signature, bringing an end to a three-month negotiation between the California Coin and Bullion Merchant Association (CCBMA) and the California Department of Tax and Fee Administration (CDTFA). The legislation addresses imminent changes to coin and precious metal sales tax threshold levels, ensuring clarity and fairness for California dealers and consumers.

The issue arose when a San Diego coin and bullion dealer contacted the National Coin and Bullion Association (NCBA) seeking clarification on the new penalty assessment from the CDTFA. NCBA discovered that the lack of communication from the regulatory agency was a common concern among California dealers, with no information readily available on the CDTFA website regarding the threshold changes. Upon reviewing relevant statutes and regulations, it became evident that the CDTFA had the authority to adjust the thresholds based on inflation but had neglected to update public records accordingly.

The CDTFA had announced a new threshold level of $2,000, up from the previous $1,500, in December, with an effective date of January 1, 2023. Prompted by NCBA, the CCBMA president contacted its lobbyist, Steve Cattolica of SC Advocates in Sacramento, to address the issue. Steve conducted extensive research and engaged in communication with the CDTFA.

After persistent efforts during May and June, Steve successfully advocated for a change in the sales tax regulations, pushing the implementation date to January 1, 2024, as per statute. However, CCBMA expressed concerns about retroactive collection of sales tax from buyers, as the relief offered by the CDTFA only covered penalties and interest, not the tax itself.

As a direct result of Steve’s research and direct communication with the CDTFA, the agency sought assistance from the California Senate Committee on Governance and Finance to introduce legislation clarifying the starting date of the sales tax increase. This initiative led to an amendment to SB 889, which was recently passed on consent, setting the implementation date as July 1, 2023, and establishing that any future changes would not take effect before July 1.

The bill has now been sent to Governor Newsom’s office for signature, anticipated in August. Once signed, California coin and precious metal dealers will be required to collect sales tax on any sales under $2,000.

NCBA expresses its gratitude to Steve Cattolica for his determination and expertise in resolving this issue, which impacts all California coin and precious metal dealers. The association remains committed to promoting fair and transparent practices within the numismatic and precious metals bullion communities.

To learn more about the National Coin and Bullion Association (NCBA) or to join, please visit ncbassoc.org/membership.

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About NCBA

The National Coin & Bullion Association (NCBA) is a 501(c)(6) tax-exempt trade association dedicated to the coins, currency, and precious-metals bullion communities for 40 years. NCBA exists to promote and safeguard the interests of its members, serving as the industry watchdog to maintain a favorable legislative and regulatory climate in the United States federal government and individual state governments. For more information, visit nationalcoinbullionassoc.org/membership or email [email protected].

CoinWeek
CoinWeek
Coinweek is the top independent online media source for rare coin and currency news, with analysis and information contributed by leading experts across the numismatic spectrum.

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